Ethnic thrifts' balance slips

In an age of national banks and electronic service, immigrant banks are fading fast


Things haven't changed much at Hull Federal Savings Bank since it opened a century ago to cater to German and Polish immigrants spilling into Locust Point from the dockyards a few blocks away and from Fort McHenry down the road. The bank still only offers one type of savings account and fixed mortgages, and that's it.

When change did come, it was slow. Bank managers didn't install a telephone until 1989, when federal regulators required it, and they didn't start using computer systems until after Y2K.

Those were minor events, though, compared with what happened in 1996, according to bank officer Michael Baumann.

"That's when we first got air conditioning," he said. "That was probably the biggest change."

In an age when large banking chains offer one-stop shopping for finances, online bill payments and automated teller machines, Hull Federal Savings is an anachronism.

In a rowhouse distinguished only by a simple, wood-framed sign hanging in the front window, it's one of a few remaining banks begun by and for immigrants in ethnic enclaves that dotted Baltimore at the onset of the 20th century. Historians and experts estimate there were once several dozen of the small thrifts in the city.

Now those banks are a disappearing institution. They face an urban landscape altered by suburbanization. They struggle to keep up with industry regulation and complicated financial products.

Many eventually get swallowed by regional or national banks looking to expand without the expense of building a branch and a customer base.

The number of immigrant banks in Baltimore has dwindled to somewhere in the teens; no official count is kept.

Baltimore's Maryland Permanent Bank and Trust Co., for one, started in 1910 to serve the needs of mostly Jewish immigrants.

Last year, the bank agreed to be bought by Warren, Pa.-based Northwest Savings Bank, which has more than 150 branches in five states. Maryland Permanent's two branches will open under the new name on Monday.

Other ethnic banks have run into trouble with regulators. Federal auditors recently found that Saint Casimir's Savings Bank, formed in 1911 by Polish businessmen who would lend to new immigrants when other banks refused, is not meeting the credit needs of the neighborhoods it serves today through four branches on Baltimore's east side.

A low rating on community reinvestment could mean that regulators disapprove a bank's plans to merge or expand. Officials with Saint Casimir's didn't return phone calls seeking comment.

Golden Prague Federal Savings and Loan Association, started by Czechoslovakian businessmen in 1912, has been operating for months under a supervisory agreement with federal regulators that's intended to ensure that it comes into compliance with various regulations.

Joseph Platek, the thrift's president, said it hired an outside compliance firm and plans to petition to be released from the agreement this year.

"Hopefully, they will see the strides we've made," he said. "We're subject to the same rules and regulations as much bigger institutions. Due to our size, we couldn't possibly do all this stuff alone."

Began as lenders

Many immigrant banks started as building and loan companies, where residents would deposit money that would in turn be lent to others. Until the Great Depression, which prompted the creation of the Federal Housing Authority and mortgages that could be repaid over decades, Baltimoreans typically had to amass a 60-percent down payment and pay the remainder off in five years, said Antero Pietila, a former editorial writer and reporter for The Sun who is writing a book on the city's history.

"In 1935, it was said there were five building and loans serving Baltimore's Italian community alone," Pietila said. "These were cornerstone neighborhood institutions that kind of fell to the wayside when the old neighborhoods changed and when various forms of regulation changed the whole banking industry."

The names of the immigrant banks often evoke their history.

Golden Prague got its name from the gold-domed architecture of that city. The year it received a charter, the thrift's Web site notes, William Howard Taft occupied the White House, the Titanic sank and Baltimore was still rebuilding after the Great Fire had destroyed more than 70 city blocks nearly a decade earlier.

Others that have kept their doors open through world wars, market upheavals and revolutions in technology and industry include Kopernik Federal Bank and Slavie Federal Savings Bank. Kopernik is named for the astronomer, better known by his Latin name Copernicus, born in 1473 in Poland. Slavie refers to the Bohemian goddess of abundance; the bank's founders were from Bohemia, now the Czech Republic.

Those ethnic roots are also reflected in the customers that have been around for years, though less so as each year passes.

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